tv [untitled] August 23, 2014 10:00am-10:31am PDT
have secondary market tables prepared by a fiscal consultant and we've adopted that formally in this policy. the swap derivative policy, which was amended to the 2004 policy was deleted. this revised policy has been reviewed and commented on by the san francisco controllers office of public finance, by jones hall, our current bod counsel, and pfm, our current financial advisor. this concludes my presentation. thank you. >> thank you. any speaker cards? >> no speaker cards . >> very fascinating subject the public does not want to comment on. i mean that, sincerely. do we have any comments or
questions by commissioners? seems pretty straightforward. >> i just want to know what is the difference between previous policy and now? >> do you know? >> i'm sorry, could you repeat that? >> yeah, i said what is the difference between the previous policy and this policy? what are the changes? >> well, basically that was the list i recited, those are all changes. some are minor, but fund emptily we've changed it to accommodate dissolution law, first of all. previous policy did not mention cfd issuance so we've included that because cfd issuance is
governed by our local goals an policies and that's what governed it in the past but we've tidied this up. in the past we have used a fiscal consultant to prepare the tables if used in our secondary market disclosure just as the fiscal consultant prepares a report for bonds offerings. this is considered best practice and gives us -- it's more -- holds more credibility with investors and rating agencies to have a third-party prepare those crucial tables regarding the revenues that support the bonds. and as i mentioned the swap derivative policy is dropped as we've never used it and we don't anticipate circumstance
where we would. few other. >> thank you. >> you're welcome. >> okay. i don't have any questions. do i have a motion? >> yeah, i move that. >> i'll second. >> commissioner singh has moved and commissioner mondejar has seconded. can you please call the roll? >> please announce your vote. >> mondejar. >> yes. >> singh. >> yes. >> rosales. >> yes. >> the vote is three is. >> next item. >> item 5j amending the office of communicative respite and infrastructure investment pool and to update references to state regulation. discussion and action resolution number 732014. madam director. >> commissioners, this is
another important fiscal update or financially related update, a housekeeping matter, but nonetheless still important to update and amend our existing investment policy that's been on the books for some time as well, so with that i'd like to ask leo, the deputy director for finance and administration to walk you through the proposed changes to our investment policy. >> i'm the director of finance administration. as the director mentioned our previous policy dates back a long time to 1989 so it is part of our practices that we review these policies and update them to reflect current needs and legislation. this one is very minor changes and the impact -- the object -- our first objective is safety, second is liquidity, that we have cash when we need it and
third is returned. we're not in the business of playing the markets. we're here to keep the public money safe and available for our work. since dissolution we've been using the treasurer's office as allowed by state law. it's been very advantageous for us. prior to dissolution most of our money we were holding on hand was with the state local funds which gives us a lower yield. they still are able to manage things -- i'm not sure exactly why it's so much better, but as i mentioned in the memo, the state has about a quarter of a for members of the pool. so our new investment policy rk niezs that arrangement. it was always allowed in the past, but this speckly recognizes it. doesn't require it, but
recognizes the arrangement and authorizes the director to enter into that arrangement. if-in the past there was a specific list of authorized states investments that came from the govment code. government code. we've taken out that list. now we just reference the government code and say we can only invest in things the government authorizes local governments to inves in. vest in. in terms of where we are now with our money, almost all is in the treasurer's pool, except for a few accounts we're required to keep separate l. there's bonds reserves that are with bond trustees. we have a few other cases where there's escrow for certain projects where the agreement required an escrow bank account and we have a few operation
bank accounts which will dwindle with time. otherwise the rest of our funds are being held by the treasurer and that has been working very well for us. the treasurer's office has reviewed and concurred with this policy. that's the end of my presentation. happy to answer any questions. >> do we have any speaker cards? >> we have no speaker cards. >> okay. don't have members of the public that i can identify present other than staff. does the commission -- >> commissioner mondejar has a clarifying question. >> let me clarify. our funds will be separate, will be with the treasurer, but we have a separate restricted fund? is that how it works? >> no. our funds are with the treasurer's pool fund, which means they are currently
investing about $5 billion on behalf of the city and county and school district and community college district and other members of the pool. they can do that much more efficiently than we can. what we have is an accounting system just like with your bank. they're like our bank and we have accounts with them that's the famous accounting system that we transitioned to after dissolution. it's actually facilitates things greatly because many of our ordinary checks that we produce everyday are produced from these funds out of the accounting system. it allows us a line of credit because when we have the expenditure authority in our system we can spend these funds and it just recognizes that we have that authority, we promise to have the cash behind it and automatically any of our accounts without positive amounts in that earn the interest. the controllers office runs that distribution process.
any a count that's negative, that particular account just gets the same interest rate on a negative basis, charged interest at that rate. now, on net we still have quite a lot of money sitting with the treasurer including some old funds that we have on hand at any time. >> commissioner mondejar, it may be a -- as i understand you, you wanted -- what about other funds not with the treasury. there are still some funds that are with external bank accounts, some that are mandated and required due to the bond ventures with bond trustees required to hold that and we get reports that we reconcile with them and then some, perhaps escrow accounts that are required by various development agreements, typically for our affordable housing projects, funds are dispersed pursuant to conditions in the development agreement for the loan for various affordable housing
projects and then as john indicated, things such as a retail op roigs, it's just a lot of work to have people with credit cards, checks for south beach harbor and the two garages to work with the treasurer's office so those continue to be in separateback bank accounts. >> we keep very close track of our accounts and they are audited at the end of each year. >> okay. commissioner singh. >> how much money do we have in the funds, like, we have most of the money in the treasury? i mean, money market funds or what kind of -- where we keep all the money? >> well, as i mentioned we have quite a fair amount of bond research money required by our
bonds and that's in the tens of millions of dollars in u.s. bank and bank of new york that manage those. and then with the treasurer right now we have -- it's in the tens of millions of dollars. i didn't come with that exact number right now, but that includes some of the old housing bond proceeds that we haven't yet spent down down that are holding and not in escrow accounts. it includes the tax increment we've received. we have a lot less than we had at dissolution. i know at a certain point we had about $300 million at the time of dissolution and we are spending that down on the projects we are charged to implement. we still have tens of millions on hand that we are trying to spends.
>> [inaudible]. >> sorry? >> she shallly [inaudible]. >> yes. that's set up be the charter. >> who is the member of those committee? >> i think that by the charter it includes the controller, a couple members of the public that are appointed by the controller, the public utilities commission representative, the puc has the largest amount. the airport is also by charter, a member of that. >> do we have a list of those committee members. >> we can provide you that list in a follow up memorandum to the commission. >> i just wanted to know. >> who signs their checks? >> who signs our checks right now? >> yeah. >> well, checks that go through the accounting system are signed by the controller so -- >> upon approval by the executive director and by you, right? >> well -- >> yes, there's an invoice
approval process, there's a conformance process, but the check is cut by the treasurer and signed by the controller. even prior to this when it was wells fargo or bank of america, the executive for checks and balances, the executive director didn't sign the checks. it was always another signature required and separate deputies to make sure there was no potential conflict so it's part of a check and balance to have -- >> for other bank accounts we don't use checks anymore, we do wire transfers from those accounts and there's a very limited number of people that can approve those wire transfers. usually it's me approving them, submitted by someone else, you can't submit and approve. >> who's our bank? >> who's our bank or banks?
>> the treasurer has gone through a big rfp process. we've used wells fargo as our primary operational bank and we still have a couple of accounts that with are -- al wells fargo and our bonds, our major trustees are u.s. bank and bank of new york. >> i think the city has deposits in several banks. >> yeah, i think bank of america is the major. but i know -- i'm not sure where they are with their rfp. they do rfp and then change their relationship. >> how often do they issue an rfp? do you know? >> i don't know that for sure. i imagine every five years. >> we can include that with the oversight members along with the frequency of the rfp in a brief memo. >> i have a, again, a question of curiosity. i saw a reference to a commercial paper program. do we have one? >> the city does. the city has a major commercial
paper program. we do not. we issue long term debt. >> yeah. >> we don't issue paper -- >> i just saw the reference there in the policy for commercial paper. >> i don't think the department of finance would [inaudible] get too creative -- >> the reason i know that is because the airport, especially after september 11, commercial paper program was very useful, but that was very different -- >> yeah, we will be exploring financing options in the future if we are unable to sell bonds for our major projects and transbay and we don't have enough money as a pay as you go basis. we have been talk with the city about some sort of relationship and using their debt issuance possibilities if we can get the of to agree to a loan agreement between the city and us. it's just something we're exploring if we don't have other financing options available.
>> thank you. okay, i have no other questions. >> commissioner singh, anymore questions? >> no. >> no more questions. >> i move that. >> commissioner singh moves. >> second. >> commissioner mondejar seconds. moved and seconded. please call the role. >> commissioner mondejar. >> yes. >> commissioner singh. >> yes. >> rosales. >> yes. >> the vote is three is. >> thank you. motion passes. please call the next item. >> item 5k authorizing the executive director to enter into a memorandum of understanding between the san francisco and the city and county of san francisco controllers office of public finance for assistance with debt issuance and administration. >> to the extend that we would
like to use their depth, their capacity. we have arrangements with the controllers office for surge accounting and other work you've previously approved, mayor's office of development, plan, et cetera, this is another one of those items that will help us with the work we have before us that is our managing and debt portfolio and refunding, pry mayly. with that, i'd like to ask deputy director of finance and administration, to walk you through the proposed mou terms. >> thank you director and chair and commissioners. i am leo levinson. this is a clean up item. it is to bring before you what is our practice, but we feel it's worthy of formalizing because it is a significant with the city and there are some dollars involved which come out of the cost of issuance accounts when we issue debt. of and so we want -- and we
also want to really get it down in writing with the controllers office so we wrote down our roles. the controllers office of public finance manages the very large multibillion dollar debt portfolio for the city and so they have a great depth of knowledge both about the market and about the credit of the city and also a very strong interest in our debt for two reasons. one is because we're paying back most of our debt from property tax, which, if we do it in the most economic cal way, most of the money saved goads back to the city, 55% or so, and that's important to them that we're efficiently managing our debt. and secondly our credit matters to the city. if we did something wrong and there was a headline about a default or some other thing we did with debt that didn't look
that would reflect on the city's credit rating because of association. they have a strong interest and willingness to help us in making sure that we're doing things in the best possible way for our debt issuances. they help us develop the teams, review the teams when we want to issue debt shs review the strecktures we put together, provide input on that, and then as we mentioned br on the debt policy our disclosure rules, we're trying to piggy back. they don't provide training, which we should do, on what you need to know about as you approve our debt, what responsibility you have as approvers of debt so we may
call upon them to help us to do a training session in the future. but if ocii is off the public finances there in a consulting and supportive role. the payment for their services does generally come from the cost of issuance so if we don't issue they wouldn't get paid for their time. this provides if there's special requests we make. if they think they need to be paid we would do a special budget for that and do it under our usual procedure. i'm happy to answer any questions. >> thank you. do we have any speaker cards? >> no speaker cards. >> no member of the public appears available to speak. commissioners, any questions. >> i don't have any questions. >> commissioner mondejar.
>> did i hear you correctly that they're not getting paid for advicing out unless they feel like they should be? >> no, no, that's not what i intended to say. no, i meant that generally they get paid when we issue debt there's some cost of issuance budget. in our last set i believe it was $12,500 was how much their staff time came to that have charged are the proceeds of issuing the debt. just as a scale i think that's out of around $300,000 total if you take in the bottom counsel and underwriters, et cetera, so it's a modest amount of the cost of the debt. if there were an extra consulting role where we wanted them to spends some time, mou says they need to tell us if they want a special budget to be paid that would be separate from the cost of issuance and we'd agree to it first. they couldn't bill us outside
the cost of issuance without talking to us first. >> that sounds more sensed. >> so they were to bill us for reimbursement for city attorney time, that's separate from our city attorney work order? >> yes, that would be. that would be -- >> that's basically their -- their counsel? >> yes. >> okay. so -- >> i move that. >> thank you. >> wait a second. >> so it's been moved, seconded. please call the roll. >> commission members, please announce your vote. >> mondejar. >> yes. >> singh. >> yes. >> rosales. >> yes. >> vote is three is. >> thank you. so yes, when we're set to skinny commission, as i keep saying, we need to be very
vigil ent on where people are. >> are there any speaker cards for public congressmen? >> no speaker cards. >> report of the chair. >> i the do not have a report for today. next item. >> next order of business is item 8, report of executive director. >> i don't have a formal report other than to direct you to the proposed forward calendar that goes out to the rest of the year and will certainly explore opportunities for other meetings, should there be a potential conflict. >> very good, since there's so few of us that's a possibility. next item please.
>> next order of business, item 9, commissioner questions and matters. madam chair. >> any questions, matters? >> no questions. >> the only matter that i have and per happens it's a question is that since we're doing housekeeping with the review of our various policies do we have a sense -- or do you have a sense of what are the other ones coming? we've talked i think a little bit about the sbe policy, which is a major one obviously. there wouldn't necessarily be clean up there, but any other policies? i mean, is there something -- maybe a list of ongoing policies that need to be tweaked, if you will? >> it comes to minds there's an existing records retention policy that we're reviewing. we're still in the analysis phase. we're not quite ready to make any potential recommendations to the commission. we want to do more due diligence in that record.
certainly the personnel policy, the changes that were made, we'll take a look at the rest of the housekeeping items now that we've completed all the due diligence reviews t audits, the budget, this gives us a bit of breathing room, even though there's significant am of activity, we want to make sure we're keeping all policies up to date so we'll take a look at that as well. >> the only other question now that you mentioned it is that when we amend our policy the amendments are applicable. perhaps this is a question for mr. brian, our general counsel, moving forward, do the amended policies apply, for instance, to development? i mean, how do they apply going forward? some may be incorporated in documents and mous, but presume they have
prospective effect. >> i think i look forward -- the prize orty, the resolution the commission recently adopted to create preference for ellis act housing par tis pantses was a look forward because we've got, like, amber in time so to speak if there were other contracts, loans, agreements, et cetera, that were previously approved that only gave certificate of preference holders preference. we can't unwind those, but it's a look guards. with each of these policies we'd have to look at what's the application for particular projects moving forward. >> as an example if we were to amend i know the personnel policy to go from two to one year, as i mentioned, that would be applicable to going guard, so it would be -- i presume -- i mean, you don't need to answer the question, but i'm thinking out loud that that would be a potential
beneficial change that could have a beneficial impact on former commissioner ellington, i think. >> yes, i think so. >> okay. >> but that's the state of your policyings that exist at the time then, you know, moving forward that's what we'd implement under. so if you decide to change that policy it certainly would be applicable, but we want to look at that -- >> yeah, yeah. >> because i'm also curious about why we have a two year policy versus one year, which is with the city so would just be interested to finds out why that was, why that happened, since we're going to approve it, what the reasoning was of the previous commission or whoever proposed that. i also have a question about -- since we're talking about personnel, how are you on hiring? are we fully staffed?
i know last time you said your trying to ramp up your staffing. >> we have a good deal of recruitment still underway for project manager positions, compliance positions, really any position that was vacant in the budget we're almost in the process of actively recruiting for all of them. there's a tipping point to stagger them a bit so we are underway to fill all vacant positions. >> commissioner singh, we are on commissioner questions and matters. do you have any? >> no. i don't have any question or matter. >> next item. >> item 10, closed session. there is no closed session. the next item is 11, adjournment.
have special event we're all women that relax and have fun you know everything is friendly and kind we're all equal i'm happy that >> all right. i am calling the small business commission to order. it is monday, july 28th at 2:00 p.m.. and i'd like to thank sfgov-tv for taping our commission meeting. item number 1 is call to order and roll call. commissioner steve adams is absent.